CHICAGO AUTOMOBILE TRADE ASSOCIATION MEMBERS AGREE TO:
- Promote and maintain honesty and dependability in our business operations and to avoid deception and fraud.
- Employ truth and accuracy in our advertising and selling of automotive products.
- Stand by any guarantee given with the sale and service of motor vehicles.
- Strive constantly to improve our business methods and ethics and to maintain fair competition to the end that the public will be better served.
- Refrain from the performance of any act which would be injurious or detrimental to the automobile-retailing industry or contrary to the public interest.
Letter from 2015-16 Chairman, Mike McGrath, Jr.
2016-17 CATA Officers (clockwise from top left, Tony Guido, Ray Scarpeilli, JR., Mike McGrath, Jr., John Hennessy, Bill Haggerty and Dave Sloan.
DEAR FELLOW CATA MEMBER:
My year at the helm of the CATA was active indeed. The momentous change in how Illinois taxes leased vehicles was as significant as we expected. Lease penetration in the Chicago market before the change took effect in 2015 was about 10 percent. That figure 18 months later is about 30 percent.
The CATA's related advertising campaign, "The Lease You Can Do," has been carried on radio and digital to promote the benefits of leasing for consumers largely unfamiliar with vehicle leasing. Increased leasing also means more late-model cars in dealership inventories.
The association's robust $1.2 million annual advertising budget promotes three messages: leasing and certified pre-owned vehicles and expert servicing available at new-car dealerships. Over the past year, one-quarter of the budget has been earmarked for digital components, and the results have been notable.
On the Illinois legislative front, state Sen. Jim Oberweis tried again-and, so far, failed-in his quest to open car dealerships to sales on Sundays. The latest bill is languishing in the Senate Assignments Committee and is unlikely to be considered during the General Assembly's brief fall veto session.
Few dealers support lifting the state's blue law on auto sales. Instead, they favor giving employees that day off, especially since banks are not able to finance vehicles on Sundays. Lifting the ban on Sunday sales also would increase dealership costs without increasing sales, which could lead to higher prices for consumers.
We keep a watchful eye over whatever transpires in Springfield, and when we speak, our voice is heard. Lawmakers recognize that sales at Illinois dealerships generate about 16 percent of all the tax revenue collected by the state, and that dealerships account for about 13 percent of all Illinois payroll spending.
And we have to be watchful, for lawmakers in search of revenue regularly float the idea of eliminating the 1.75 percent allowance granted to retailers for collecting the state's sales tax, as they consider ways to increase collections.
The association is mulling whether to ask state lawmakers to amend the Illinois Motor Vehicle Franchise Act to limit the frequencies of manufacturer-mandated facility upgrades. Probably emboldened by new-vehicle sales the last couple years, some manufacturers have imposed two such mandates in a three-year period. But there is inherent risk to seek any changes to the Act: When it is opened for amendments, other groups could attempt to add amendments favorable to them.
Lawyers for the Illinois attorney general's office said when they met with the CATA in February 2016 that the office's actions and fines against area dealers had increased over the previous 12 months. Some cases sought six-figure fines for selling a vehicle above its advertised price. "Saying 'a consumer didn't see the ad, so I can't be held liable' is not a defense" in such cases, said Illinois Assistant Attorney General Greg Grzeskiewicz.
He reminded dealers that we need to be careful when dealing with out-of-state advertisers who might not be as familiar with the motor vehicle advertising regulations of Illinois and Indiana. "As we've said before, it's the dealership's responsibility to make sure an ad is compliant," Grzeskiewicz said.
A helpful resource for dealers is the Chicago office of the Better Business Bureau, which reviews dealers' ads for compliance after-and even before-the public sees them. Patricia Kelly, the BBB's counsel, said the office typically receives three to five requests a day from dealers asking for evaluations before the ad goes public.
The CATA is prepared to fight an attempt by Tesla to buy land in Westmont to sell vehicles. We relented a few years ago when the Illinois Secretary of State somehow granted the manufacturer a dealer license, but this is worth the fight. If Tesla were to succeed as a retailer, other manufacturers surely would debate the need for dealers.
The second of six annual minimum wage increases for businesses in Chicago took the current base pay to $10.50 beginning July 1, 2016. That compares to $8.25 an hour in the rest of Illinois. The annual Chicago hikes culminate at $13 an hour beginning in July 2019. Illinois voters in November 2014 backed a statewide hike to $10 an hour, but that vote was nonbinding.
As the minimum wage gap between Chicago and the rest of the state widens, suburban employers can remind their workers of the total compensation package they receive, which in many cases goes well beyond a paycheck. Indirect compensation can be defined as additional compensation such as employer-paid portions of health/dental/vision insurance, retirement benefits, paid time off, and more.
It is hard to believe that we now are in the final year of the current four-year collective bargaining agreement with Local 701. We are preparing with the CATA's labor relations counsel, Franczek Radelet, for negotiations in the months ahead, and we are confident a new agreement can be reached with the technicians before July 31, 2017, when the current contract expires.
I am so proud of the support the area's dealers have shown for the USO of Illinois by hosting Barbecue for the Troops fundraisers. The event in July 2016 marked the fourth year the CATA has coordinated the collective efforts. Through three years, participating dealerships raised more than $260,000 for USO programs that support deployed troops, military families, wounded, ill and injured troops and their caregivers, and families of the fallen. The tally for July 2016 was not available at this publication's print deadline.
The USO, a nonprofit, non-political organization, has for 73 years provided Americans with a tangible way to express appreciation and gratitude for the dedication and sacrifice of the nation's troops and their families.
Over the four summers that CATA dealerships have hosted the USO barbecues, some dealers have expanded the opportunities for their customers to support the cause, such as by including areas on their dealership websites for supporters to donate, thus transforming the barbecue from a one-day event to a month-long drive. In fact, the Barbecue for the Troops campaign, which had been a national USO fundraiser, has folded in every other market besides Chicago.
The CATA's "Chicagoland Dealers Care" program, launched in 2008, continues to support area nonprofits that dealers support. The program matches a dealer's cash contributions to a charity up to $1,500 and is a visible attempt to create awareness of the positive influence dealers make in their communities.
The CATA in June 2016 awarded the third of 10 annual scholarships in honor of an NBC 5 Chicago staffer who was a longtime ally of the CATA during the station's Chicago Auto Show broadcasts and other endeavors. Carol Cooling, who succumbed to cancer in 2013, was a graduate of John Hersey High School in Arlington Heights, and $1,000 grants are available to that school's seniors who are heavily involved in school clubs or activities and hold leadership positions. Dejanna Blair won the third Carol Cooling Scholarship.
"I think it's important for others to understand that skills don't always come naturally to me, and that's why this acknowledgment means the most," Blair said. "I've auditioned for various programs but didn't make the cut, so I kept trying to find other activities that were a better fit and put my mind to succeed at those. This award makes all of that effort worthwhile."
It is a great time to be a new-vehicle dealer. What needs to be low-unemployment, interest rates, gas prices-is still low. And what needs to be high is still high: the housing market and the average age of vehicles on the road. Indeed, the seasonally adjusted annual sales rate remains on par with 2015's record unit tally of 17.47 million vehicles.
My best wishes to you for success in the year ahead!
Mike McGrath Jr.